Central concepts

There are six central concepts that need clarification and more precise definition in terms of how they are understood in the context of this research. The research phenomenon is approached through concepts such as reverse use of customer data, customer data and information, additional information, value co-creation, customer’s value creation, and firm’s value creation. They contribute to the pre-understanding of the research phenomenon and were chosen on the basis of their ability to serve the purpose of the research.

1.5.1 Reverse use of customer data

Traditionally, customer data is used to meet the informational needs of the firm, for example, through identifying the most profitable customers or being able to cross-sell additional goods and services to customers. Firms convert customer data into information that can be used as input to the firm’s own value-creating processes.

Here, however, reverse³ use of customer data refers to the process of firms converting customer data into information that supports customers’ value creation.

The focus is thus on using customer data to meet customers’ informational needs; to

3 Several other alternatives for the term referring to firms refining and giving customer data back to customers were considered. Reciprocal and two-way use of customer data were also carefully assessed and evaluated. However, both of them were disgarded. The former was perceived as the firm and the customer mutually using the same type of customer data for their own purposes, and the latter shifted the focus toward using customer data interactively from the customer to the firm and vice versa, and as a whole constituting two-way use of customer data. Furthermore, at an earlier stage of the research process, alsoinnovativeuse of customer data was contemplated. It was excluded due to the conceptually complex nature of innovativeness, and the danger of it as a concept referring to introduction of a new set of data mining techniques. Eventually reverseuse of customer data was chosen as it manages to capture the process of using customer data not only to benefit firms, but also to support the customer’s value creation. Reversing, as a verb, also characterizes the basic logic of challenging existing and conventional managerial mindsets in terms of customer data usage.

provide customers with information that they can use as an additional resource to their value-creating processes (Figure 2).

Figure 2. Positioning reverse use of customer data in the context of the research

Even providing customers with a receipt after a transaction could be regarded to some extent as a reverse use of customer data. However, here it is important to distinguish between what customers consider as information; i.e. data that endows relevance and purpose. Toward that end, when referring to reverse use of customer data, it is assumed that the information has relevance for the customer and can be used as input to the customer’s value creation.

1.5.2 Customer data and information

In marketing literature, there are several concepts that refer to customers as a source of some type of information. Customer information, customer insight, market information, or market intelligence carry somewhat different meanings and are used in diverse ways in varying circumstances and within different literature streams. In this research, the focus is neither on customer intelligence nor customer understanding in general, but more specifically on customer data. Customer data is understood as being precise, concrete, and detailed in nature and resulting from the customer’s direct actions. Thus, in relation to, for example, market orientation or market intelligence, customer data is not interpreted. In more detail, similarly with the definition of Blosch (2000), customer data is defined as a set of discrete,

objective facts about an event (Davenport & Prusak, 1998, 2). Given the nature of the food retailing context, customer data is understood as pos-data that is generated automatically at the moment of transaction and carries objective information for the firm about that specific transaction: what was bought, when was bought, where was bought, how much did it cost, and – if customer loyalty card was used – by whom was bought.

Customer data converts into information if it becomes meaningful to customers (or firms). As argued by Drucker (1988, 4): “Information is data endowed with relevance and purpose”. Information is a message with a sender and a receiver, and it has an effect on the receiver, as described by Davenport and Prusak (1998, 3):

Information is meant to change the way the receiver perceives something, to have an impact on his judgment and behavior. It must inform.

Hence, in relation to the research phenomenon, data cannot be used as input to the customer’s value creation if it lacks relevance and purpose. Information, in turn, can be of use in the customer’s value creation because it is ultimately defined by the customer. In other words, information is subjective and customer-dependent in nature. Therefore, it is always the customer who defines whether reverse use of customer data results in such information that can be used as input to his or her value creation.

1.5.3 Additional resources

The idea of providing customers with additional resources is central for this research. In the current service-related marketing literature, and especially within the service logic literature, customers’ value creation is understood as consisting of goods and/or services as well as additional resources, such as knowledge, information, skills held by the customer and other resources that are used together in the customer’s value creation when value-in-use emerges (see e.g. Grönroos, 2008a;

compare with Vargo & Lusch, 2004; for resource-advantage theory). Therefore, additional resources can be regarded as important resources in order for the value potential of the resources to be actualized. Toward that end, this research focuses on exploring reverse use of customer data as a mechanism through which such

additional resources (information resulting from reverse use of customer data) can be provided to the customers’ value creation.

1.5.4 Value co-creation

The concept of value co-creation can be regarded as one of the recent buzz words within marketing. In general, it can be argued that the concept strives to incorporate the shift from passive to active customers, from value being perceived as a result of the firm’s manufacting process to value being defined and created by the customer;

from the notion of value-in-exchange to value-in-use. Despite the wide variety of contributions to the domain where customers and firms jointly create value, the concept itself has remained at a rather abstract level of analysis. Consequently, its fuzzy nature, resulting from the differing approaches which endeavor to capture the essence of the concept, has impeded the development of a more clear-cut definition.

Nevertheless, despite the partly conflicting approaches, in the context of this research, the differing approaches to value co-creation are seen as rather more complementary than contradictory. The approaches employed by, for example, S-D logic and service logic are understood as enriching the conceptual insight and are collectively used to establish a more synthesized perspective to value co-creation.

What is fundamental in the constructed approach to the concept is its effort to discover and capture relevant dimensions and aspects of a current marketing phenomenon. In that respect, contrary to the general perspective, value co-creation is not regarded as something that is unconditionally, always, co-created (compare with Vargo & Lusch, 2008a). It is not considered as a general lens through which every marketing phenomenon can be viewed. This research approaches the concept conditionally; the concept is seen as introducing something new to marketing (compare with Grönroos 2008a), it sheds more light on understanding specific empirical phenomena. Consequently, the concept becomes more tightly linked to real-world marketing problems, and can therefore also be used in the normative sense. Ontologically, these two differing approaches to value co-creation represent alternative viewpoints; they contain a fundamentally differing constitution of the concept.

1.5.5 The customer’ s value creation

In this research, the customer’s value creation is used to refer to the process of value actualization; it refers to the customer’s creation of value-in-use. Value is understood as “always uniquely and phenomenologically determined by the beneficiary” (Vargo & Lusch, 2008a, 7). Customer value actualizes in customers’

everyday practices when the resources provided by the firm together with other resources and applied skills are used (Grönroos, 2008a). Value-in-use can also emerge from possession of resources or from mental states (Grönroos, 2011).

Despite the rather cumbersome definition of customer value, it serves the research purpose as the focus is not so much on value as an outcome but on value creation as a process (Grönroos & Helle, 2010). Customers’ value actualization is considered as being constituted of resource bundles, such as goods that are provided by the firm, and additional resources, such as information, knowledge, skills and other resources that are critical in the customer’s ability to eventually create value for him- or herself (see Payne, Storbacka, & Frow, 2008). In more detail, the customers’ value creation is perceived as consisting of processes, resources and practices which customers use in order to manage their own activities (Payne, Storbacka, & Frow, 2008).

In the context of food retailing, the customer’s value creation is often linked to a diverse set of processes, resources, and practices that customers have in relation to food consumption (compare with Payne, Storbacka, and Frow, 2008). These can include buying raw materials from the local food store or the customer’s knowledge and expertise in how to prepare a decent meal. Information, knowledge, skills, customers’ kitchen equipment as well as time are all good examples of the vital resources related to customers’ value-creating processes within the food retailing context. Therefore, it is important to understand that also other resources than the goods alone have a major role in customers’ value creation.

1.5.6 The firm’ s value creation

Value creation always employes two sides: the customer and the firm (Gupta &

Lehman, 2005). Therefore, focusing only on the customer’s value creation easily leads to a far too narrow perspective on value creation. Therefore, in the context of

this research, interest is also laid on the firm’s value creation. The firm’s value creation refers to the way how a firm creates value to itself. It does not describe how the firm creates value for the customer, because customer value is understood as something that emerges in customers’ value creation and in customers’ context; not something that is produced during a manufacturing process. The firm’s value creation is characterized by its’ value-creating processes that are fundamentally driven by the firm’s focus on increasing shareholder value. When discussing how reverse use of customer data supports the firm’s value creation, the focus is thus on understanding the process through which it eventually converts into the firm’s value.